Twice the price and just as nice: Irving’s Arctic patrol ship double the cost of previous five

The project was to build five ships, each at $400 million, and only proceed with a sixth if Irving could find savings within the existing budget. That didn’t happen

David Pugliese, Ottawa Citizen

Updated: November 9, 2018

Royal Canadian Sea Cadets wait for the start of the naming ceremony for Canada's lead Arctic and Offshore Patrol Ship, the future HMCS Harry DeWolf, at Halifax Shipyard in Halifax on Friday, Oct. 5, 2018. Andrew Vaughan/CP

Building a sixth Arctic patrol ship to add to the five originally commissioned from Irving Shipbuilding for the Royal Canadian Navy will cost taxpayers $800 million — double the price-tag of each of the other vessels. The Liberal government announced the construction of the sixth Arctic and Offshore Patrol Ship, or AOPS, last week after a push by Irving and its employees for additional work. The construction of the sixth vessel shows the government’s commitment “to maximizing stable employment” for Irving while providing equipment to the navy, Carla Qualtrough, Minister of Public Services and Procurement Canada, said in a statement. Each Arctic and Offshore Patrol Ship, or AOPS, costs $400 million. But the decision to build another such vessel comes with additional costs since the federal government is stretching out construction of that ship and a number of others to allow Irving employees to retain their jobs until a new fleet of larger warships, called Canadian Surface Combatants, is ready for construction.

Another $150 million will be required to extend the production schedule at Irving, said Pat Finn, the assistant deputy minister for matériel at the Department of National Defence. Another $250 million will be set aside to deal with fluctuating labour rates, increased project costs and any increases in foreign exchange rates or other costs. “By adding a sixth ship and stretching (the building) out, we’ve added two years of work,” Finn said Under the previous timetable the fifth AOPS would have been delivered by the end of 2022. Under the new schedule the fifth ship will now by delivered by the middle of 2023 and the sixth ship in the winter of 2024, Finn said. The first AOPS is now in the water and is expected to be officially delivered to the Royal Canadian Navy in summer 2019. The project was originally to build five AOPS and only proceed with a sixth if Irving could find savings and work within the existing budget. That didn’t happen.

The Royal Canadian Navy’s first Arctic and Offshore Patrol Ship (AOPS) at Irving Shipbuilding’s Halifax Shipyard on Friday, December 8, 2017.Irving Shipbuilding Inc. Handout via CP

But Finn said maintaining a steady flow of work at the Irving yard will save money over the long-run as skilled labour will be in place to begin construction of the Canadian Surface Combatants in the early 2020s. The alternative is to lay staff off, then hire at a later date. “You let everyone go, then you hire them back but they’re not the same people so you’re starting over,” Finn said. “That’s why we’re prepared (to spend) extra to stretch out the work.” Finn said even though the construction of some of the AOPS is being stretched out, there is still the possibility of some form of downturn between the end of that program and the start of the surface combatant project. He said that Irving is trying to find additional international customers for the Arctic and offshore patrol ships, which if successful could help maintain employment at the yard. Government officials are also looking at the possibility of starting some portions of the surface combatant project earlier than planned, Finn said. Irving and its employees had wanted the federal government to finance the building of two more AOPs.

They have also been raising concerns that Davie, a rival Quebec-based shipyard, will now share in some of the future maintenance work for the navy’s Halifax-class frigates. David Baker-Mosher, an official with Unifor, the union representing workers at the Irving yard, said last week that the government’s plan to split maintenance between Irving and Davie could cost jobs at the Halifax site. But Davie official Frédérik Boisvert has said Irving has $65 billion in contracts from the federal government and 1900 workers. Davie has received less than $1 billion in contracts and has less than 200 people working and 1400 laid off workers waiting to be recalled, he said. There are seven frigates that will need maintenance on the east coast over a five-year period. But military and Department of National Defence officials are concerned the Irving yard won’t be able to handle all the work as it will also be in the midst of building the surface combatant warships. Each of the aging Halifax-class frigates will require about a year of maintenance work, and in 2020 the navy expects maintenance will be needed on two frigates at the same time. • Email: dpugliese@postmedia.com | Twitter: davidpugliese

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